The IRS delivery time has begun and will run until the end of May. There are several ways that you can use to deliver your personal income tax return, different dates that you need to know and various annexes that you need to fill, depending on your income streams. So it’s time to clarify some of the questions you may have concerning this important task.
In which form can I submit my IRS tax return in Portugal?
The submission of the IRS for 2014 can be done in paper at the local tax office, through post, or via the tax portal (which just been redesigned recently). However the most advisable way is to give this job to your accountant or tax adviser. He will make simulations before filling the forms, analyze and compare your tax return, before submitting it, making sure you are paying the legal minimum.
When do I need to submit my IRS tax return in Portugal?
In April for all those earning only pensions or salaries. In May for all the others cases.
Who needs to fill an IRS tax return in Portugal?
If you are resident then most likely you are forced to submit an IRS. Only very few residents are exempt, for instance those that earn less than 4.104€ either through a pension or a salary.
What happens if I forget to file a return or do it incorrectly?
It’s important to be aware that from 2015, the fines for non-compliance with the dates, can be very high, depending on the type of miss conduct and the delay in filling the return, fines can go from 375€ to 22.500€.
I’m non-resident, do I need to submit a return?
First of all, are you sure that you are non-resident? Do you have a fiscal representative? If not, where do you receive your IMI council tax bills? If you receive them at your property in Portugal, then most likely you are resident for tax purposes in Portugal. If you are non-resident, then you will only submit a IRS return in Portugal, if you have income from Portuguese source.
When do I need to pay my IRS?
After you submit your tax return the tax authorities will validate your declaration and you will receive a tax bill in the post, giving you 30 days to pay. Please note that if you intend to be away during the warmer months and don’t have a fiscal representative to receive your bills, you will incur in monthly interest charges and penalties, if paying out of date.
Some suggestions to make your IRS this year a stress-free task
We strongly advise our customers to prepare everything with time, in order to complete this process smoothly:
PASSWORD: Make sure you and your partner have a password to access the Tax Portal. If you do not have one, request a new one immediately;
COPY OF ID AND NIF: for you, your partner and any dependents you may have;
INVOICES: gather all documents that can be used to reduce your tax bill, such as medical or chemist receipts, invoices, statements for your insurances, investments and mortgage, rental receipts, etc;
DECLARATIONS OF INCOME: gather the statements of income and withholding taxes;
BANK ACCOUNT: know your NIB at hand, as it will be necessary to include on your IRS return and will make any tax refund much quicker.
CGT: if you have sold a property in 2014, make copies of the deeds (for purchase and for sale) and gather invoices for the real estate commission and home improvements. These can be deducted against any capital gain tax.
Remember if you have a resident status but your income was earned abroad, you have to deliver along with the tax return the ‘J’ Annex which discriminates the values received abroad. There are taxation agreements in place between Portugal and several countries to avoid double taxation, so the impact this will have on your IRS will depend on several factors. In the next issue, we will go through the double taxation, capital gain tax and non-habitual residency in more detail.
And remember, we can assist you with all this bureaucracy, please feel free to contact us and avoid any late submission fines.